EXCLUSIVE: Consultant defends loan to Rezko associate

Bernard Schoenburg

Tuesday

Feb 26, 2008 at 12:01 AMFeb 26, 2008 at 1:15 AM

Springfield consultant Bob Kjellander said Tuesday there is “absolutely nothing remotely wrong or improper” with the short-term, $600,000 loan he made to a suburban Chicago businessman, who, federal authorities believe, later distributed some of that money to four Tony Rezko “assignees.”

Springfield consultant Bob Kjellander said Tuesday there is “absolutely nothing remotely wrong or improper” with the short-term, $600,000 loan he made to a suburban Chicago businessman, who, federal authorities believe, later distributed some of that money to four Tony Rezko “assignees.”

In an interview with GateHouse News Service, Kjellander noted that U.S. District Judge Amy St. Eve, as part of a ruling on motions for the upcoming trial of Rezko, turned down a prosecution request to introduce information about the transaction between Kjellander and Glenview businessman Joseph Aramanda.

“I made a loan to an acquaintance because he offered a very favorable interest rate,” Kjellander said. “The loan was repaid in full with interest prior to the expiration date of the note. I did nothing improper, and frankly, I don’t believe anyone is suggesting that I did anything improper.”

Jury selection in the corruption case against Antoin “Tony” Rezko is scheduled to begin in Chicago on Monday. Rezko is alleged to have aided lawyer Stuart Levine in seeking bribes or other payments, including campaign contributions, from companies seeking to do business with or get regulatory approval from the state.

Rezko was a fundraiser and adviser to Gov. Rod Blagojevich, and the nine-page statement from St. Eve entered into the case Monday made it clear for the first time in a public filing that Blagojevich is the person who has been referred to as “Public Official A” in earlier government documents. Blagojevich has been charged with no wrongdoing, and he maintains he knew nothing of any deals to make donations to his campaign fund a condition of state business.

In discussing Kjellander, St. Eve’s document states that prosecutors hoped to introduce evidence at trial of a “series of movements of money by Rezko through Aramanda” that would help show Rezko’s “strained financial situation,” which could explain some of the fraud.

Kjellander, a Republican National Committeeman from Illinois and former treasurer of the RNC, in 2003 received $809,000 in a consulting fee for helping Bear, Stearns & Co. get a lead underwriting role for a $10 billion state bond issue.

In the St. Eve document filed Monday, it discussed the government’s view of the “approximate $809,000 money transfer from Bear Stearns that Rezko purportedly directed to Kjellander, who, in turn, transferred $600,000 of the funds to Aramanda. The government argues that Aramanda thereafter paid out approximately $450,000 to four separate Rezko assignees…”

Rezko’s defense saw discussion of the Kjellander-Aramanda transactions at the trial as “a needless and lengthy detour that will result in a mini-trial of Rezko’s relationship with four individuals who otherwise have nothing to do with this case. …” St. Eve agreed, saying that to allow discussion of the transaction could “confuse or mislead the jury and cause undue delay at trial.”

Aramanda has not been charged with any wrongdoing.

Kjellander said Tuesday that the implication that Rezko directed Bear Stearns and its $809,000 to Kjellander is “absolutely untrue” as far as he knows.

“I was recruited by Bear Stearns,” Kjellander said.

He said he had met Aramanda through both having been involved in a Chicago fundraising event for St. Jude’s Children’s Research Hospital in Memphis. Rezko has also been a fundraiser for that institution.

Kjellander said when he made the loan to Aramanda, it was because “he indicated to me he had a business need, and he offered an interest rate that was very significant, and so I took it.” Kjellander added that he didn’t know of Aramanda’s plans to pass along money to others. The loan was paid back within four or five months, Kjellander said.

Asked if he had any communication with Rezko about the loan to Aramanda, Kjellander said, “With the trial coming up, I don’t think it would be appropriate for me to get into any details.”

St. Eve did allow another reference to Kjellander to be used in the trial. The judge said evidence could be presented that Rezko and Levine first met on Nov. 2, 2002, at a dinner party hosted by Dr. Fortunee Massuda and her husband, Charles Hannon. Massuda was appointed by Blagojevich to the Illinois Health Facilities Planning Board after her foot clinic business donated $25,000 to the governor’s campaign.

Rezko’s defense did not object to admission of evidence that at the 2002 dinner party, “Rezko and Levine discussed certain common acquaintances, including Robert Kjellander and William Cellini, at that dinner,” St. Eve wrote.

Kjellander said Tuesday he has “no idea” why that discussion is important for the trial, and he wasn’t at the party.

After release of the 2006 plea agreement of Levine, Kjellander was identified by Jon Bauman, executive director of the Teachers’ Retirement System, as “Individual K.” That identity was used to describe someone seeking TRS investment business for Washington, D.C.-based Carlyle Group.

“I have never been informed that I am” Individual K, Kjellander said Tuesday. He has, however, spoken in the past about representing Carlyle before the board.

In a 77-page document called a “proffer” filed by prosecutors in December and outlining their case against Rezko, a footnote states that the same labels used for individuals in the Levine plea agreement were used in the proffer, though individuals considered co-schemers of Rezko’s would be called co-schemers instead of individuals. That footnote adds that “Two individuals referred to in Levine’s plea agreement (Individuals K and L) and one entity (Investment Firm 8) were not referred to in this filing.”

Bauman had also identified “Firm 8” as Carlyle Group.

Levine, of Highland Park, pleaded guilty to mail fraud and money laundering and was to continue helping authorities before he is sentenced.

In the proffer, Cellini, a prominent Springfield Republican, was referred to as “Co-Schemer A,” but has not been charged with any wrongdoing.

Bernard Schoenburg can be reached at (217) 788-1540.

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